New orders for durable goods in the United States dropped in September for the third time in four months, with a fall in aircraft sales pulling down the otherwise firm growth, government data showed on Oct. 26.
New durable goods orders were down 0.8% from August to $200.3 billion.
Excluding the aeronautics-dominated transportation sector, new orders rose 1.7% in the month.
Overall, durable goods orders were up 9.4% year-on-year in September, a healthy but not outstanding figure.
"In spite of the considerable uncertainties in the U.S. and global economic climates, the September report on demand for long-lasting goods suggests that U.S. manufacturing growth will likely remain positive over the near-term," said Cliff Waldman, economist for the Manufacturers Alliance/MAPI. "Industry data point to slowing but sustained growth in the factory sector as convincingly positive demand for primary and fabricated metals as well as machinery suggest that manufacturing supply chains are active and filling orders.
"Of importance for the sustainability of the still weak U.S. economic recovery, business equipment investment, while clearly not accelerating to levels needed for a more robust growth and labor market outlook, is also not capitulating to the persistent cloudiness that hangs over the U.S. economy," he added. Non-defense capital goods orders, excluding aircraft, a proxy for business equipment investment, rose by 2.4% in September after an essentially flat performance during the prior two months. In the current environment, economic data will remain volatile and need to be monitored frequently."
Economists said it was a sign that the manufacturing economy continues to grow despite consumer and business sentiment surveys that suggest otherwise.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said it was "yet more evidence that the sharp drop in business confidence in recent months is sending a misleadingly weak signal about the pace of growth."
"Companies did not like the debt ceiling mess, the downgrade and now the Euro-chaos, but they are cash-rich and competitive pressures are forcing them to spend," he said.
"Of importance for the sustainability of the still weak U.S. economic recovery, business equipment investment, while clearly not accelerating to levels needed for a more robust growth and labor market outlook, is also not capitulating to the persistent cloudiness that hangs over the U.S. economy," he added. Non-defense capital goods orders, excluding aircraft, a proxy for business equipment investment, rose by 2.4% in September after an essentially flat performance during the prior two months. In the current environment, economic data will remain volatile and need to be monitored frequently."
Copyright Agence France-Presse, 2011
